Related Events

The Michael A. Dunlap & Associates quarterly survey in January of business activity in the office furniture industry indicates it is still on “a very steady, albeit flat, trend line,” said Michael Dunlap, owner and principal of the business consulting services company.

The resulting overall index score is 54.30, down slightly from the October index of 54.68. The highest recorded index was 59.72 in July 2005; the lowest was 41.45 in April 2009. The January survey was the 35th in the series; the average overall index is 54.32 since the surveys began in August 2004.

“Given current economic conditions, I think this is good news,” said Dunlap. “The overall index continues to remain well above 50 and is definitely in line with the 35-survey average. It indicates that the industry is on solid ground and on a positive track.”

Dunlap’s survey is designed to reflect the current business activity of the office furniture industry and its suppliers in 10 key business activities, with respondents rating each area on a scale of one to 10. The higher the score, the better that segment of the industry is doing. An index score of 50 means there has been no change in the quarter.

The January 2013 MADA/OFI Trends survey was sent to more than 750 individuals involved with office furniture manufacturing and suppliers around the world. More than half of the survey responses came from top executives.

The January 2013 survey highlights are:

Gross Shipments measured 59.00, significantly higher than the 35-survey average of 57.80. Order Backlog recorded 52.65, significantly lower than the average of 57.81.

The Employment Index rose to 51.60, nearly even with the 35-survey average of 51.69. The Hours Worked Index declined to 53.48 and is below the average of 55.53.

The Capital Expenditures rose to 57.45; Tooling Expenditures also rose, to 53.33. These compare to the 35-survey averages of 55.34 and 55.55, respectively.

New Product Development rose to 62.45, but is just below the average of 63.34.

Raw Material Costs rose slightly to 46.17, but is much better than the 35-survey average of 43.74. Employee Costs dipped to 47.00; the average is 46.97.

The Personal Outlook Index jumped from 54.59 to 55.20, well above the average of 54.52.

“The declines in Gross Sales and Order Backlog index values are somewhat surprising, as both had improved during the previous quarter. I think that (Hurricane Sandy) had more impact on this industry in the fourth quarter than we originally thought,” said Dunlap. “Employment Levels and Hours Worked index values also fell for the same reason. Both manufacturers and suppliers appear to be equally affected.”

He said the modest improvements in Capital Expenditures, Tooling Expenditures and New Product Development are “mixed” when compared to the long-term survey averages, “which is disconcerting. The decline in New Product Development — although solidly in the 60’s — is puzzling.”

Dunlap noted that changes in Raw Material Cost and Employee Cost index values are “always a concern and rarely show much improvement. They remain above the 35-survey averages, which is good news.”

“I am very happy to see the increase of the index in Personal Outlook,” said Dunlap.

The most frequently cited perceived threats to the industry’s success are health care costs, transport costs, energy costs, exchange rates and the costs of materials (steel and wood).

Restricted Content

About GRBJ

Since 1983, the Grand Rapids Business Journal has been West Michigan's primary and most-trusted source of local business news. The weekly print edition of the Business Journal, a must-read for the area’s top decision-makers, is known as the business newspaper of metro Grand Rapids, Holland, Muskegon and all of West Michigan.

grbj.com provides the same trusted and objective business reporting that the Business Journal is known for -- plus real-time original content, timely enewsletters/alerts, exclusive blogs and more. Business Journal subscribers receive the weekly print edition, including bonus publications like the annual Book of Lists, and also complete access to all content on grbj.com.

The Grand Rapids Business Journal is published by Gemini Publications.